The governor’s budget proposal includes increased funding for UC and CSU but likely not enough to keep the systems from raising tuition—which the governor said he expects. The proposed tuition increases (about 5% at CSU and 3% at UC) are modest compared to the large increases from 2006 to 2011 (104% at CSU and 92% at UC). PPIC has shown that while financial aid increases protect most students from low income families from tuition hikes, students from middle- and upper-class families see their costs increase.
The governor’s proposed budget also phases out the Middle Class Scholarship program. Created by the legislature in 2013—after CSU and UC costs climbed rapidly—this program aimed to help students from families too wealthy to receive Cal Grants (state grants that cover tuition for low-income students). The scholarships cover 10% to 40% of tuition (depending on family income and assets) for eligible students from families with incomes up to $156,000. About 37,000 students benefitted from the scholarship this year.
How much do middle-class students pay?
To characterize what a student pays to attend college, we often use the term “net price”—a comprehensive accounting of student costs and assistance. To determine the net price, we add books, room and board, and other expenses to tuition, and subtract federal, state, institutional, and local grants and scholarships (money that a student doesn’t have to pay back).
Students who receive some form of federal financial aid (grants, loans, work study, etc.) generally pay much less than the full cost of college. For students from families making less than $80,000, federal, state and local grants usually cover at least the full tuition at both CSU and UC—but these students pay a net price that could be as high as $11,000 a year at CSU and $13,000 at UC in order to cover expenses other than tuition. Students from families making $75,000 to $110,000 are generally too wealthy for federal and state grants; they pay a much higher average net price of about $16,000 at CSU and $21,000 at UC. (Also, many students pay close to the full cost because they do not apply for and/or are ineligible for federal aid.)
The most recent cost data is from 2013‒14—this was the first year of the Middle Class Scholarship program. Average awards that year were $1,100 or less, and once the program was fully implemented awards were slated to range from $1,300 and $5,400 at UC and $700 and $2,700 at CSU, depending on the income and assets of eligible students and on the number of applicants.
Not surprisingly, the phasing out of the Middle Class Scholarship and the impending tuition increase are expected to have a disproportionate impact on middle- and upper-class students. As a result, those students will probably pay more for their degrees.